Gender pay equality

In the era of globalisation, businesses that are actively exporting and operating in various countries and regions are facing discrepancies in how laws and regulations are applied. Companies usually have to deal with issues of incorporation and registration as well as organising their management and taxation, but we should also mention gender pay equality as a globally growing trend. This article takes a look at some of the findings of PwC’s Global Gender Pay Compass.

PwC survey

To prepare an interactive tool for exploring global trends in gender pay equality, PwC conducted a survey in 69 countries. The focus was on legislation those countries have adopted to ensure equal pay. The countries were split into three groups:

No rules or penalties to minimise gender pay discrepancies;

General rules are in place prohibiting gender pay discrimination, with no penalties;

Special rules have been adopted to prohibit gender pay discrimination with penalties.

The results of this global trend analysis implies that countries with a high standard of living have adopted special rules on this issue, which suggests that development goes hand in hand with preventing discrimination and ensuring pay equality. The issue of gender equality might soon become topical in Latvia and cause businesses and the government to revise their pay policies and rules to prevent discrimination.

The countries surveyed have adopted or proposed five key legislative changes to minimise gender pay discrimination.

External certification

Iceland sets the gold standard, requiring companies with over 25 employees to obtain a certificate of equal pay every three years, based on an external independent assessment.

The Dutch government is considering following Iceland’s lead in requiring external certification.

Reporting requirements

Pay transparency is the buzzword. Gender pay reporting requirements came into force in Germany and the UK last year. Significant pay gaps disclosed since then have provoked much public reaction, spurring company CEOs to prioritise addressing the issue.

The Irish government is now looking to follow the UK’s approach to reporting gender pay differences.

Penalties for non-compliance

A number of countries (such as Cyprus, Kosovo, Morocco, Serbia and Spain) have underpinned their gender pay equality laws with financial penalties for non-compliance. In the Dutch government’s proposals for external certification, fines for non-compliance could be significant.

Employer action plan

We see a growing trend in some countries allowing the employer to draw up an action plan (Belgium, Germany, Serbia, Spain, Sweden, and Ontario in Canada) or a code of conduct (Argentina) to address the gender pay issue internally.

Other measures to regulate pay equality

Governments are also open to a range of creative measures to promote pay equality, such as prohibiting discrimination through a nationally applicable collective bargaining agreement (Belgium), prohibiting discussions about new joiners’ salary history (US state of Massachusetts), considering making it easier for employees to bring an equal pay claim (New Zealand), or following the lead of other countries (e.g. Ireland and the Netherlands).